The stock market is expected to rally in early trading on Wednesday, as it recovers from significant losses experienced in the last two sessions. It's anticipated that market opening will see an uptick, with S&P 500 futures already showing a 0.5 percent increase.
This upward trend continues in light of Federal Reserve Chair Jerome Powell's prepared statement for the House Financial Services Committee. Powell is expected to suggest a reduction in interest rates at some point this year but will stress the need for a more substantial assurance that inflation trends will persistently approach two percent.
Powell describes the economic forecast as "uncertain" and predicts that progress towards the Fed's two percent inflation goal remains uncertain. According to Powell, the downfall of policy restraint prematurely or excessively might result in reversing the progress made in managing inflation, forcing even tighter policy implementations to regain the two percent standard. However, delaying or underplaying the decline in policy restraint could excessively dampen economic activity and employment.
Powell notes that any future fluctuations in interest rates will fundamentally depend on a careful analysis of incoming data, the changing outlook, and the balance of risks.
On another note, ADP, a payroll processing company, reports a less than expected increase in private sector employment in February. The firm records a rise of 140,000 jobs in February following an revised increase of 111,000 jobs in January, a figure slightly below what economists had predicted.
Shortly after market opening, the Labor Department plans to release its January job openings report. The expectation is a slight decrease in job openings to 8.9 million in January from 9.0 million in December.
The Commerce Department is also set to release its January wholesale inventories report, which is expected to see a 0.1 percent decrease.
After moderate pullbacks during Monday's trading, the stock market saw a more drastic downturn on Tuesday, with the more substantial slump hitting technology-focused companies. However, stock market indicators managed to rebound from their lowest points but remained distinctly negative.
In international trading, the Asia-Pacific region showed mixed performances on Wednesday, with Hong Kong's Hang Seng Index rising by 1.7 percent but Japan's Nikkei 225 Index slightly down and China's Shanghai Composite Index down by 0.3 percent.
In Europe, the six major markets demonstrated modest growth. The UK's FTSE 100 Index rose by 0.3 percent, the French CAC 40, by 0.1 percent, and the German DAX Index remained steady.
In commodities trading, crude oil futures increased $0.97 to $79.12 a barrel after a $0.59 drop to $78.15 on Tuesday. Gold is also on the rise, trading at $2,142.60 an ounce, up by $0.70 from the previous session's closing.
When it comes to currency, the U.S. dollar is trading at 149.60 yen as compared to 150.05 at the close of New York trading on Tuesday. Against the euro, the dollar is trading at $1.0876, seeing a slight increase from yesterday's $1.0857.
